Why are companies like Capital one charging APR of 30%

morse1

I can not see how credit card companies can put interest rates up to 30% I have two Capital One and Egg with all the others around 22 and 24%. What I dont understand is how the Government has not placed a Cap on the APR I can understand a free market but a mortgage is just the same and they follow Bank rates> My problem is they have put it so far up I can not manage it now and have called CCCS this now puts me in bad credit and they will have to freeze the interest !!> It is not my fault I could manage when interest rates were 16% but they have nearly doubled!! I just don't understand how they have been allowed to get away with it!!! All that is happening is more and more people are going bankrupt of IVA or DMP.....:mad:

izools

You will have been given 30 days to opt out of the APR increases by telling the credit card company to close the account. Your repayments and agreement will then have had remained the same with the only difference being you're not allowed to spend any more on the cards.

You didn't do this as such will have been seen by the card companies to have accepted the APR increase.

The laws are there, but if you choose not to opt out of the APR increase by agreeing not to use the cards again, you've created a rod for your own back I'm afraid.

QuantumCaffeine

As someone who is also stuck with a card charging nearly 30% (Santander), you have my sympathies. Unfortunately, as izools points out, you will have been notified of the changes and given a chance to stop using the card and pay back at the old rates.

However, izools, it's not as simple as you make it sound: some card companies are far better than others at highlighting these rate changes: Santander's notification was discreetly added to a statement and easy to miss (unlike Tesco's, which sent it, clearly set out, in a separate letter).

The only thing I can suggest is that you get in touch with them and express your displeasure (politely, calmly but firmly). It's also worthwhile being persistent: I got the brush-off from Santander, only to get through to a sympathetic manager, who tried to help and credited me with £50 as a goodwill gesture. (That'll get eaten up pretty fast at 30% interest, but it's always something.)

izools

QuantumCaffeine wrote: »

However, izools, it's not as simple as you make it sound: some card companies are far better than others at highlighting these rate changes: Santander's notification was discreetly added to a statement and easy to miss

Yes I was reading your thread.

A strictly worded letter with clear suggestion of what litigation you will start given that you weren't notified (bluff) helps a lot in instances like this It did the trick with my friend's Vanquis card

morse1

izools wrote: »

You will have been given 30 days to opt out of the APR increases by telling the credit card company to close the account. Your repayments and agreement will then have had remained the same with the only difference being you're not allowed to spend any more on the cards.

You didn't do this as such will have been seen by the card companies to have accepted the APR increase.

The laws are there, but if you choose not to opt out of the APR increase by agreeing not to use the cards again, you've created a rod for your own back I'm afraid.

That is not the point I have no bad credit history but they put interest charges up so high it is legal robbery and it is pushing people into bad debt !! I really cant give a stuff right now I will just go bankrupt and all that happens they will increase the rates to compensate on other peoples credit cards until they in turn do it! I can see credit card firms going out of business soon ....

QuantumCaffeine

izools wrote: »

Yes I was reading your thread.

A strictly worded letter with clear suggestion of what litigation you will start given that you weren't notified (bluff) helps a lot in instances like this It did the trick with my friend's Vanquis card

Very true: at the least you should point out that you'll take the case to the Ombudsman if necessary, and keep pointing out that all you want is for them to be fair and reasonable. You may well find (as I did) that the person you're speaking to is no happier with what's happened than you are. (Just because the company behaves a certain way, that doesn't mean its staff aren't reasonable human beings. Always treat the people you speak to as people, not just corporate mouthpieces.)

However, I wouldn't recommend lying to them, particularly if (as in Santander's case) the notification came as part of a statement. After all, they'll say, how come you paid your bill if you didn't get your statement? Lies are, in any case, a bad idea and weaken your moral position. If you feel they're being unfair and unreasonable, say so and let them know that you're sincere. Also, compare them (if possible) to other companies who've treated you more fairly; it makes it harder for them to argue they're doing the right thing.

Finally, don't bluff: if you continue to feel strongly about it, go to the Ombudsman. It's free, and it can't hurt. Small claims court may be a step too far, but it's also worth considering if you think you can make a solid case.

QuantumCaffeine

morse1 wrote: »

That is not the point I have no bad credit history but they put interest charges up so high it is legal robbery and it is pushing people into bad debt !! I really cant give a stuff right now I will just go bankrupt and all that happens they will increase the rates to compensate on other peoples credit cards until they in turn do it! I can see credit card firms going out of business soon ....

I understand how you feel, but please try to calm down a bit before you call them. If you come across as calm and rational, you've half a chance of getting them to sympathise with you; shout at them and you'll only set them against you.

Also, if your credit history is good, look at taking out another card (ideally a 0% balance transfer deal) and transferring everything to that. Even in today's climate, I would hope you can find a way to switch to someone else at a lower rate.

TFD_2

morse1 wrote: »

I can not see how credit card companies can put interest rates up to 30% I have two Capital One and Egg with all the others around 22 and 24%. What I dont understand is how the Government has not placed a Cap on the APR I can understand a free market but a mortgage is just the same and they follow Bank rates> My problem is they have put it so far up I can not manage it now and have called CCCS this now puts me in bad credit and they will have to freeze the interest !!> It is not my fault I could manage when interest rates were 16% but they have nearly doubled!! I just don't understand how they have been allowed to get away with it!!! All that is happening is more and more people are going bankrupt of IVA or DMP.....:mad:

morse1 wrote: »

That is not the point I have no bad credit history

Why if you have no bad credit history are you paying such high APR's on your other cards? I have some bad credit history and most of my cards are 14.9%-16.9%.

As mentioned elsewhere, you did have a chance to opt out, but didn't act on it.

As to mortgage rates tracking interest rates - it's more complicated than that!! Firstly mortgages are secured, so less chance of somebody defaulting and the bank losing it. Secondly, some mortgage rates are fixed. If your credit history isn't A1, and you haven't got a huge deposit, then the rate you pay will be massively higher than the BOE base rates.

_Andy_

morse1 wrote: »

I really cant give a stuff right now I will just go bankrupt

Wow, what a great attitude.

_Andy_

morse1 wrote: »

I can not see how credit card companies can put interest rates up to 30%

Because it's a variable rate (which you signed up to)

a mortgage is just the same and they follow Bank rates

No a mortgage is not 'just the same' and the only mortgages that follow bank rates are tracker mortgages. Credit cards are not trackers.

Wutang_2

_Andy_ wrote: »

Wow, what a great attitude.

Remember which site you are on! Its practically a given: take out card (or loan or mortgage etc), can't afford repayments, blame everyone else then bankrupt/IVA/reclaim/compensation/unenforcable/too thick too understand etc.